Correlation Between Okta and Hana Financial
Can any of the company-specific risk be diversified away by investing in both Okta and Hana Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Okta and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okta Inc and Hana Financial, you can compare the effects of market volatilities on Okta and Hana Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Okta with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okta and Hana Financial.
Diversification Opportunities for Okta and Hana Financial
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Okta and Hana is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Okta Inc and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and Okta is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Okta Inc are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of Okta i.e., Okta and Hana Financial go up and down completely randomly.
Pair Corralation between Okta and Hana Financial
Given the investment horizon of 90 days Okta is expected to generate 2.99 times less return on investment than Hana Financial. In addition to that, Okta is 1.26 times more volatile than Hana Financial. It trades about 0.02 of its total potential returns per unit of risk. Hana Financial is currently generating about 0.08 per unit of volatility. If you would invest 3,629,454 in Hana Financial on August 28, 2024 and sell it today you would earn a total of 2,660,546 from holding Hana Financial or generate 73.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.33% |
| Values | Daily Returns |
Okta Inc vs. Hana Financial
Performance |
| Timeline |
| Okta Inc |
| Hana Financial |
Okta and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okta and Hana Financial
The main advantage of trading using opposite Okta and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okta position performs unexpectedly, Hana Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hana Financial will offset losses from the drop in Hana Financial's long position.The idea behind Okta Inc and Hana Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hana Financial vs. Korea New Network | Hana Financial vs. Dong A Eltek | Hana Financial vs. Dreamus Company | Hana Financial vs. SK Bioscience Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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